The following is the balance sheet of a VRY-SMPL Bank. All the items are recorded based on the book value and they were purchased at par value. Asset Liability 5 year semi-annual

Asset		Liability
5 year semi-annual 6.45%pa coupon	250	6 months treasury bills	250
bond
10 year 3.5% annual coupon bond	100	6 year annual coupon (6.30%pa) bond	300
10 year treasury bond 7.5 % semi	350	Equity	150
annual coupon
	700		700

1. Assume current market yield is flat at 6.5% p.a. What is the duration gap of the bank?

2. Using the duration gap estimated from question 6, what will happen to the net worth of the bank if the market yield goes up by 1.5%p.a.?

3. What is the maturity gap of the bank